Mumbai eateries go on strike against new service tax

Mumbai: Around 20,000 hotels, restaurants, licenced tea and snacks outlets as well as ubiquitous vada-paav stalls in Mumbai go on strike to protest the new service tax (ST). "In Mumbai, around 18,000-20,000 hotels and restaurants have expressed solidarity with the move to protest the new ST on fully or partly airconditioned eating houses," Indian Hotels and Restaurants Association (AHAR) general secretary Shashikant Shetty said.

Monday's action is part of an all-India protest launched by hoteliers and restaurateurs who have strongly denounced the new tax, which was implemented from April 1. Managements and patrons have been hit hard, Shetty said, adding that restaurant bills have been hiked by as much as one-third for those preferring to have their meals in air-conditioned comfort.

Terming the new service tax unjustified, AHAR has said the last union budget "exploits" the common man who comes to eating houses to satisfy his hunger. Shetty said AHAR and other organisations have already made written submissions to UPA chairperson Sonia Gandhi and Finance Minister P Chidambaram but to no avail.

"Most MPs we met gave us a patient hearing but pleaded helplessness," he said. He pointed out that a majority of AHAR members in Mumbai were small eating joints which kept a part of their premises airconditioned in view of customer demands.

"The new ST will drive many customers to illegal roadside eateries which run their businesses without paying taxes," Shetty said. He claimed that nearly 135 eateries in middle-class areas in Mumbai have already downed shutters in the past couple of years, and laws and norms have made it impossible for many restaurateurs to continue their business profitably.